Political risk insurance
Political risk insurance is a type of
insurancethat can be taken out by businesses, of any size, against political risk—the risk that revolution or other political conditions will result in a loss.
Political risk insurance is available for several different types of political risk, including (among others):
* Political violence, such as
revolution, insurrection, civil unrest, terrorismor war;
* Governmental expropriation or confiscation of assets;
* Governmental frustration or repudiation of
* Wrongful calling of letters of credit or similar on-demand guarantees; and
* Inconvertibility of foreign
currencyor the inability to repatriate funds.As with any insurance, the precise scope of coverage is governed by the terms of the insurance policy.
The underwriting of political risk insurance is a dynamic, growing business. As globalisation increases, there are more corporations doing more business in more places around the world with each passing year. Some of the changes occurring in the business are high growth, new product offerings, and a greater role for private capital. [cite news | url=http://www.dnaindia.com/report.asp?NewsID=1027950 | title=For political risk, insurance isn’t all | date=
May 5 2006| accessdate=2006-07-17 | work=Rustomjee | publisher=Diligent Media Corporation | last=Mishra | first=K.C.] [cite news | last = Kambayashi | first = Satoshi | title = Of coups and coverage: Political turmoil is costly. Unless you are fully insured. | work = The Economist | date = April 04 2007| url = http://www.economist.com/finance/displaystory.cfm?story_id=8967224 | accessdate = 2007-04-08 ]
While political risk insurance policies are sometimes
manuscripted for specific situations, the major political risk insurers have standard forms for the coverages that they issue.
* [http://www.miga.org Multilateral Investment Guarantee Agency]
* [http://www.pri-center.com World Bank's Political Risk Insurance Center]
*cite news | url=http://www.irmi.com/expert/Articles/2002/Wagner07.aspx | title=Political Risk Insurance in Asia: Who Purchases It, Where, and Why | date=July 2002 | accessdate=2006-07-17 | publisher=International Risk Management Institute | author=Daniel Wagner
* [http://www.opic.gov Overseas Private Investment Corporation]
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